UPDATE FROM MR TONG - HEIGHTENED RISKS

The Edge Issue 1222 (July 2-9)

Hightened risks due to - worsening trade spat, geopolitical risks, global interest rate height, falling liquidity, and inflation trending higher.

Mr Tong recommendations:

1) Stay cautious.  Do not leverage to avoid force selling if price drop further

2) Stay invested for the longer term (buy when value to be found)

STAY PUT WITH VALUE INVESTING

1) His reading of global economy and markets is PESSIMISTIC, rightly so based on capital flow (EM to USA) and interest heights trend.

2) But he doesn't bet on his own assessment on stock markets (i.e he did not recommend RUN and COME BACK LATER)

3) The reason he did not recommend run and come back later as he is a VALUE INVESTOR as claimed, i.e. long term investor who buys when he sees value and avoid TIMING the markets.

PROBLEMS WITH INVESTORS

1) Do not take anyone's recommendations blindly as each one has different circumstances (risk, tenure, capital outlay).  Mr Tong's assessment on the general market is WEAK after considering a few factors.  

2) However, you may want to reduce or avoid on STOCKS where you know many has leverage on them (the drop is much sharper and violent).

3)  Consider run first and come back later? Swap into BLUE chips with small and mid cap stocks (they recover first vs the mid and small cap).

4)  Add in more capital outlay (if just started investing post GE14) or very little expose.

5)  Sometimes assessing the global markets and economy is not easy.  Situation make a U turn quite quickly and violently.

6) Reduce stocks that profit may reduce if USD strengthen.

MARKET SENTIMENT IS PESSIMISTIC (ALL OVER THE WORLD)

1) Yes, world growth is somehow derailed with the trade spat.

2) EM is always perceive "riskier" than USA when trouble starts (perception = truth)

3) Quite a few Bursa stocks went down below its intrinsic value, hence, there is opportunity for value investor only

4) Of course, (momentum trader) do not suggest to buy now until they have seen recovery in both SMA 14 and SMA 150

5) Hence Bursa is very quite especially without traders (esp mid and small cap).  However, the good news is EPF is seen slowly buying up small and mid cap (not all are good, of course)

MY FUND MANAGER LIKES EKOVEST, SHOULD YOU?

1) Not necessarily, depends on your personal portfolio and exposure to construction, properties and toll roads.

2) Have fun and invest with a RATIONALE MIND.  Each individual circumstance is different.

ONE LAST SOLUTION

SHUT DOWN YOUR BURSA SCREEN UNTIL YOU HEAR SOME GOOD NEWS.